We asked the City of Nashville to replace a “yield” sign with a stop sign.
We also wanted “S.L.O.W. (Children Playing)” signs on each of the streets.
This 3-way intersection was about 50 yards from our house, and we saw many instances of cars coming from opposite directions playing “chicken” with each other while oour children played in our front yard.
The city’s answer?
“NO! That would open up the possibility of children and parents having a false sense of security, therefore they would play more freely in the street and be more prone to being struck by moving cars.”
While this sounds ridiculous, there may actually be some truth embedded.
I see it often in real estate transactions:
- If seller provides a Home Warranty for the buyer in hopes that the Buyer will feel more secure through the Home Inspection Resolution, will that really work?
- What if seller were to negotiate a “Limit on Repairs” in the negotiations? Will that proct them from the Buyer asking for expensive repairs?
- If we get the Buyer to ante up with more earnest money, will that increase the probability of Buyer bailing out of the deal?
- Does an “Approval for financing” for the Buyer guarantee anything?
To some degree, all of the above represent “False sense of security” scenarios.
With respect to Inpections . . . If the Buyer’s home inspector finds significant structural and/or mechanical/material deficiencies, neither a Home Warranty nor a limit on repairs will guarantee that the Buyer won’t require the Seller to fix and/or replace as indicated.
Sure! The Seller can refuse to do anything and everything per the original agreement, BUT . . . in most cases, the Buyer retains the right to terminate the contract based on satisfaction with the Inspection. When the deal was negotiated, no-one knew about these issues . . . no we do.
More earnest money only proves the Buyer has more liquid cash . . . and may very well keep the Buyer more “Honest” and less likely to walk arbitrarily away from the deal . . . but what’re the odds a Buyer’s going to default on a deal anyway? Smart Buyers know they’ll get a full return of the earnest in the event of termination within the guidelines of the contract.
“Lender Approval” only tells us that the buyer has actually talked with a lender who has taken a look at credit scores, income, and debt and has determined the Buyer eligible for financing . . . Yeppers – False Sense of Security . . . anything could happen between now and closing that would make that approval meaningless . . . Buyer could buy a Corvette a week before closing – or lose a job – or decide to divorce – or die . . . and the closing would not happen.
The intention of this post is not to alarm Home Buyers and Sellers. It is simply a caution about developing False Sense of Security in a real estate transaction.
Because of the fluidity of the transactions and the myriad people involved in completing each deal, there really are no “Guarantees” until the closing is executed and FUNDED>
These are the most relevant (and least heralded) reason for EVERY House Buyer and Seller to hire a Real Estate Sales Professional.
We REALTORS take great pride in our ability to “hold each and every deal together” through all of the trials and tribulations between reaching a Binging agreement and signing that last document at the closing.
Each new transaction is a fragile newborn which needs nurturing and attention to detail.
Don’t count on fancy terms and conditions in the original agreement to remove all of your risk . . . You’ll likely be disappointed.
BTW . . . we got the stop signs . . . after We sent the city a very well documented string of written communications with them and a nice letter letting them know that if a speeding car hits one of our children because of their failure to install stop signs, we will be relentless in our pursuit of justice – The signs were installed within a week.
I’m a real estate strategist who takes very seriously the responsibility that goes with protecting and serving the best interests of our House Buyer and Seller clients . . . and that often requires plenty of no BS analysis and strategy such that we all avoid slipping into a False Sense of security.
= More Happy Home Owners 🙂